BNU: Rising to the challenges

For over a hundred years, BNU has nurtured the Portuguese pataca keeping pace with economic growth and meeting the challenges of a highly competitive environment

We meet the new chief executive officer at BNU’s head office, a piece of history in itself, its distinctive pink and white exterior adorning Avenida Almeida Ribeiro, and now considered one of Macao’s noteworthy landmarks.

“BNU has contributed hugely to the pataca fulfilling its role in Macao,” says Cardoso. He goes on to say that he firmly believes that both the currency and the issuing bank itself are pretty well established in the territory.

BNU’s beginnings

BNU was set up in Lisbon, Portugal, in 1864. Its initial goal was to act as an issuing bank in the Portuguese overseas territories, and to contribute to their economic development. The branch in Macao was opened in 1902, along with that of Guinea Bissau. They followed the establishment of branches in Angola, Cape Verde, São Tomé, Goa and Mozambique.

A hundred and ten years later, however, things looked a little different. The bank was nationalised, and in 2001 became a wholly owned subsidiary of the Portuguese Caixa Geral de Depósitos. The bank remained only in the Special Administrative Region of Macao.

“Throughout the life of Macao, BNU’s support to the Macao government has been vital. Through good times and bad – especially during the Sino-Japanese War and World War II – the support has been invaluable,” Cardoso recalls.

BNU was the first bank to launch a credit card denominated in pataca (MOP) – the BNU MOP VISA card. As well as promoting the pataca, Cardoso highlights the support given by BNU to the development of the manufacturing industry, “whether it be textiles, toys or other areas”. Cardoso says this was particularly evident in the ‘70s and ‘80s. The bank has also played an important role in funding local entrepreneurs, financing major infrastructure projects, and – particularly since the liberalisation process – developing the gaming industry.

“In the past, BNU was the financier of many major projects. Nowadays, its relationship with these concerns is more specialised, focusing on various types of service, from Automated Teller Machines (ATMs), points of sale (POS) terminals and cash management, to other areas,” explains Pedro Cardoso.

A career of challenges

“I’ve been lucky enough to work for several different banks, doing a wide variety of roles, and spanning four different countries so far. I must say that this has been the most rewarding experience to date – at least in these first 12 months,” BNU’s chief executive officer confesses.

He began his career in Portugal, working for Banco Pinto & Sotto Mayor, where he worked in the international department. He then used his expertise in international capital markets to join a start-up project, which became the Banco Comercial Português (BCP). Here he gained additional experience in planning and marketing, as well as in international affairs. In 1996, he was invited to become the deputy general manager of Banco Comercial Português at their New York branch – his first professional posting outside of Portugal.

After three years, Cardoso returned to Portugal and continued his work at BCP, holding various positions. In 2004 he accepted the role of managing the online bank, Banco Best – a multi-ownership organisation comprising one of the largest Portuguese economic groups, Grupo Banco Espírito Santo. A year later he joined another bank, Caixa Geral de Depósitos (CGD). His first posting for CGD was in Spain, where he worked for several years, as an executive board member, in a range of roles. Then he moved back to Portugal to become a CGD board member. “I was invited by the Finance minister at the time, to become involved in several different aspects of the bank’s work,” he tells us.

In August of last year Pedro Cardoso was appointed as the new chief executive officer of Banco Nacional Ultramarino (BNU) in Macao. He says he finds the challenge particularly rewarding because Macao is not only “in a phase of very strong economic growth, but it is also particularly multicultural”. Despite being “very well established” in Macao, and “accepted wholeheartedly by the general public and the authorities”, Cardoso believed that the bank needed a change. He says it needed to modernise and aim for a level of growth that was at a compatible pace with the growth of the economy, as well as with the banking sector.

Simple strategy

“It’s simple,” says Pedro Cardoso. “The idea is to differentiate BNU from the competition through the quality of our service delivery.” The executive says the bank’s sole focus of attention is now the customer, and therefore they must present an impeccable service and approach. In Avenida Almeida Ribeiro you can already see the difference. There’s a new automatic queuing system in the waiting area, and new account manager offices are in place.

Recently BNU has posted an increase in its customer numbers. In December, it had around 180,000 clients, up by 8 percent from the previous year. As Pedro Cardoso puts it, BNU has around 30 percent of Macao’s population as private customers. Most of these are Chinese, with the second-largest group being Portuguese. Increasing numbers of Westerners are arriving, however, from the United States, Australia, New Zealand and other countries in Asia such as Vietnam and the Philippines.

The bank has 14 branches in Macao, employing 440 people. According to the chief executive officer, the emphasis is on training the staff to pass on the strengths of their products and services to the customers. The sense of a wider social responsibility is going to be maintained, by continuing to support institutions such as Tung Sin Tong and individuals such as students from the University of Macau, by funding scholarships. They will also get involved in other sectors, like sports and culture.

BNU approaches the market in a segmented manner, through four business areas. The first one focuses on large companies, including the main gaming operators and major utility companies in Macao. The second segment is a new one, which is being developed at an incredible pace – focused on small and medium-sized enterprises. Retail banking occupies the third segment. This year the bank launched the new service BNU Advantage, designed to provide support and services to customers who need a dedicated account manager. The final business area is for institutional clients of high net worth, in the private banking sector.

Macao is not the only place in Asia where the CGD group is present. Its management includes offices of the CGD group in Shanghai and Zhuhai, as well as in India. Pedro Cardoso says the bank has good prospects for long-term stability that can build on past tradition but move forward from that to future endeavours. According to him, the global economic crisis is not currently a major threat. “The CGD Group is present in 23 countries, and the vast majority of its operations are currently in areas of strong economic growth. This applies not just to BNU but also to other organisations that operate across multiple countries,” he says. He adds: “Obviously BNU has a very important role at this stage, due to the different indicators of the CGD group, both in terms of results and in terms of turnover.”

Future prospects

The chief executive officer’s appointment is for a three-year term, and he believes that “the transformation process for BNU will be ongoing throughout this period”. He refuses to give long-term prognoses, however. “My career and my business and personal life have always been filled with challenges, and I’m expecting my position here to be no different.”

Last year the bank posted a profit of MOP 325.3 million – a year-on-year drop of 13 percent. The bank’s results were negatively influenced by an increase in credit provisions and a drop in profit margins due to increasing competition in the market. Even so, it recorded a growth in turnover of 13 percent. “It’s a very balanced form of growth,” says Pedro Cardoso. “It is rare to achieve balanced growth between loans to customers and customer deposits, yet we managed to achieve this. It’s so unlike previous years in Macao’s banking sector, where the growth of credits has been three times higher than deposit growth. The contrast with the last two years is particularly apparent,” he explained.

The competitive market has had a damaging effect on short-term results. . But the chief executive officer believes competition is a positive thing, pushing companies to deliver a better service to customers and better prices for consumers, whilst always improving on staff skills development. “Competition always acts as an incentive to prove we can overcome any challenges.”
By Filipa Queiroz in MacaoMacao magazine
(Issue N. 13, November 2012)